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Tel: +92-42-99213790; Email ID: mubbsher.khan@ibapu.edu.pk

Factors Influencing Word of Mouth Behaviour of Restaurant Industry in Pakistan

*Mubbsher Munawar Khan1, Nida Hameed2, Hina Shabbir2

1Hailey College of Banking & Finance, University of the Punjab Lahore, Pakistan 2Institute of Business Administration, University of the Punjab, Lahore, Pakistan

Abstract

The purpose of this research paper was to study the factors that influence word of mouth

(WOM) behavior with the crucial role of relationship quality. WOM is a free form of

advertisement or promotion which is shared by customers with one another. It is triggered by

an event the customer experiences. WOM marketing is nowadays considered as the most

valuable source of marketing. The cheapest source of promotion for restaurants is WOM.

WOM plays a crucial role in the services industry because services are difficult to assess as

they are experiential in nature. A detailed review of the literature was conducted in order to

find out the factors that influence WOM behavior. A self-administered questionnaire was used

to collect the data from the customers of restaurants including students. For data collection,

400 questionnaires were distributed out of which 328 questionnaires were used for the analyses.

Structured equation modeling was used for the analysis of the model. The results depict that

food quality, price fairness, perceived value, and personal interaction quality does improve

WOM behavior through the mediation of relationship quality. Whereas the physical

environment has a negative impact on customer satisfaction. This study will help the

restaurateurs to create something unique and distinctive for the customers in order to enhance

the WOM intention of the restaurant industry.

Keywords: commitment, consumer behavior, customer satisfaction, trust, restaurant

relationship quality, restaurant industry, word of mouth (WOM), electronic word of mouth

(eWOM)

Article type: Full paper

Word count: 5086

1. Introduction Word of mouth (WOM) is a type of informal communication in which the customers

give their opinion to other customers about a particular good or service which impacts the

latter’s purchase decision (Litvin, Goldsmith, & Pan, 2008). WOM is based on customers’

perceptions about the good or service which they have consumed. It might cast a significant

impact on purchase behavior of other customers and entice them into buying that particular

good or service (Jalilvand, Salimipour, Elyasi, & Mohammadi, 2017). In a survey by Balter

(2008), it was estimated that WOM communications that took place in one day were

approximately 3.4 billion out of which 2.3 billion were about brands. WOM is an important

element for the success of the services sector which persists on a strong relationship between

the customer and the services provider (Brown, Barry, Dacin, & Gunst, 2005). In studies

conducted by Jalilvand and Samiei (2012a & 2012b) it was reported that WOM does affect the

perception of tourists in the selection of their desired destination. Other researches included

effects of customer complaint service in restaurant industry (Heung & Lam, 2003); superior

service quality for competitive advantage (Gounaris, Stathakopoulos, & Athanassopoulos,

2003; Kandampully & Suhartanto, 2000; Mei, 1999); effect of WOM, service quality, physical

environment, food quality and price on consumer purchase decision (Basri, Ahmad, Anuar, &

Ismail, 2016). But only a few types of research have been conducted about the factors that

impact the WOM behavior in the restaurant industry.

The success of every industry is dependent on the customers and how satisfied they are

from the goods and services the industry provides. The restaurant industry is wholly dependent

on the satisfaction of the customers. In Asian countries, the restaurant industry contributes a

lot to the services sector (Boo, 2011). Newly established restaurants depend mostly on WOM

due to lack of promotional budget (Mangold, Miller, & Brockway, 1999). Due to high

competition in the restaurant industry, it is really challenging for the restaurants to survive

without a good image. For survival, it is essential to know the needs and wants of the customers

and then to fulfill them accordingly. WOM helps restaurants with a small budget to sustain in

the competitive industry. It is difficult to evaluate the restaurant industry because it is

experiential in nature. A customer may be able to make any comment to others and decide to

re-visit a restaurant only after experiencing it (Wirtz & Chew, 2002).

Therefore, the purpose of this research paper was to find the factors that influence

WOM behavior of the restaurant industry in Pakistan. The restaurant industry is flourishing in

Pakistan. In Pakistan the standard of living is improving and with the passage of time there is

a significant increase in the number of female workers. Females are working in order to

financially support their families. The number of female employers is also rapidly increasing

in Pakistan. Owing to these reasons more and more women tend to cook less at home and prefer

eating outside. (Safi & Awan, 2018)

In this study, it is investigated which factors affect the relationship quality that in turn

affects the WOM intention of customers (Jalilvand et al., 2017; Meng & Elliott, 2008;

Palmatier, Dant, Grewal, & Evans, 2006). This study investigated whether food quality,

physical environment, personal interaction quality, perceived value, and price fairness

influence the restaurant relationship quality which in turn increases the WOM intention in

Pakistan.

2. Literature Review

2.1 Word of Mouth (WOM)

WOM is basically a type of commitment by the customers towards the organization

which they portray by sharing their experiences with other people hither and thither about the

different goods or services of the organization utilized by them. Through this commitment, the

customers develop a long term relationship with the organization. WOM is the most powerful

and authentic form of communication which might be helpful for the customers in making a

good decision about a good or service worthy of buying for them (Silverman, 2001). It is an

inexpensive source of communication in which the information about a good or service is

transmitted by oral means (Dean & Lang, 2008). In a study by Katz, Lazarsfeld, & Roper

(2017) it was found that WOM can be more effective than newspaper and magazine seven

times; personal selling four times and radio advertising two times; for switching the brand.

WOM is an outcome of customers’ expectation regarding the consumption experience (Ha &

Jang, 2010). WOM is more crucial in services industry as services might cast a larger and more

instant influence on consumers, therefore, also involving greater risk (Jalilvand, Pool, Vosta,

& Kazemi, 2016; Mokhtaran, Fakharyan, Jalilvand, & Mohebi, 2015).

In the case of the restaurant industry, positive WOM would indeed boost the selection

of a particular restaurant by customers whereas negative WOM would result in the avoidance

of a particular restaurant. According to some previous studies there are some elements which

are considered important like food and drink, service, cleanliness and hygiene, value for money

and ambiance etc. Customers usually talk about these elements in order of their importance

(Cousins, Foskett, & Gillespie, 2002). Online reviews about a particular restaurant are

considered highly worthy as millions of people can be seen relying on them. Online reviews

are known as electronic WOM (eWOM). EWOM is a type of communication which can spread

more rapidly to even number consumers than WOM as it involves millions of people, is long

lasting and easily accessible (Jeong & Jang, 2011). In a survey by Kasabov (2016), it was

found out that Chinese customers consider eWOM as a credible source of information which

intrigues more and more customers to engage in eWOM and this information significantly

effects customers’ purchase decisions.

2.2 Food Quality

People’s improving standard of living makes them more status and brand conscious

which seduce them eating outside and paying more for good food. The selection of restaurants

depends mostly on the quality of food (Soriano, 2002; Knutson & Patton, 1993) which is even

more important than price, convenience, value and cleanliness (Mattila, 2001). It also impacts

customers’ satisfaction (Bitner & Hubbert, 1994). In order to meet customer needs and

demands, restaurant staff should base their food quality on customer wants and desires which

are very important to be fulfilled (Peri, 2006). Food quality may be represented by freshness

which is comprised of aroma, juiciness, and crispiness (Péneau et al., 2006); taste (Cortese,

2003), hygiene (Sulek & Hensley, 2004), variety in menu items, presentation (Kivela,

Inbakaran, & Reece, 1999) and temperature (Namkung & Jang, 2007). The satisfaction and

loyalty of the restaurant customers can be increased through good food quality (Andaleeb &

Conway, 2006; Clark & Wood, 1999). In a study, it was found that a happy customer shares

his experience with 5 people whereas 10 people come to know about the bad experience of an

unhappy customer (Mangold et al., 1999). So we can hypothesize that:

H1: Food quality has a positive relationship with customers’ satisfaction in the restaurant

industry in Pakistan

2.3 Physical Environment

Physical environment means the physical things or the tangibles present at the

restaurant, not only the overall environment (Bitner, 1990). The physical environment may

include the ambiance, atmosphere, and décor (Sloan, 2004). In the hospitality industry physical

environment plays an important role in growing the profits and market share (Ha & Jang, 2012;

Han & Ryu, 2009). The physical environment should be such that the customers should become

accustomed to it, feel comfortable and make memorable dining away from home. Customers

usually prefer to pay a high price when they feel a sense of pleasure and feel themselves in a

safe and healthy environment (A. Yüksel & F. Yüksel, 2003). The physical environment can

play an important role in the restaurant industry (Ryu, Han, & Kim, 2008; Wakefield &

Blodgett, 1996). Customers usually fulfill their appetite when the environment is friendly and

luxurious (Walker, 2013). According to research, the overall satisfaction of the restaurant

industry can be enhanced through the physical environment (Garbarino, & Johnson, 1999). The

perceived service quality can be enhanced through the physical environment in the restaurant

industry (Stevens, Knutson, & Patton, 1995). The factors such as nutrition quality, physical

environment quality, entertainment quality, food quality, and service quality increase the

overall satisfaction of customers (Anwar & Gulzar, 2011). So we can hypothesize that:

H2: Physical environment quality has a positive relationship with customers’ satisfaction in

the restaurant industry in Pakistan

2.4 Personal Interaction Quality

Services industry persists on the interaction and relationship between the customer and

the firm (Harker & Egan, 2006). Firms should try to develop a long-term relationship with the

customers which helps to develop trust between the customer and the firm (Yu & Dean, 2001).

Nowadays a days, an effective tactic used in the restaurant industry to develop an interactive

communication with the customers is through collecting feedbacks on food and service quality

which in turn helps to grab customer satisfaction (Jayachandran, Sharma, Kaufman, & Raman,

2005; Parsons, 2002). Through customer feedback form, the restaurant also gets customer’s

contact number through which they develop a permanent long-term communication with the

buyer which helps to increase customer loyalty as well as improve the relationship quality

(Vesel & Zabkar, 2010). Customers feel more satisfied when the restaurant provides good

relationship benefits, like discount and different offers, and would like to visit it again and

again. Personal interaction quality and physical environment can increase customers

satisfaction (Chen, 2012). Information is the main element of relationship building which tells

the seller about the needs, wants and desires of the buyers. Therefore, fulfilling them

accordingly may increase customer satisfaction and improve WOM intention (Payne & Frow,

2005). So we can hypothesize that:

H3: Personal interaction quality has a positive relationship with customers’ satisfaction of the

restaurant industry in Pakistan

2.5 Perceived Value

Perceived value is actually the trade-off between the price and benefits – the benefits

that they receive from the consumption of good or service minus the actual price they pay for

the good or service (Ryu et al., 2008). The customer assesses the utility that he receives through

a good or service by the give and takes relationship (Zeithaml, Berry, & Parasuraman, 1996).

Perceived value is usually the comparison between the cost of the product and the opportunity

cost (Rust & Oliver, 1993). Cost also determines the perceived value, if the cost is high then

the perceived value for the good or service will also be high. If the perceived value is fulfilled

then the customer is likely to share the experience with other customers and would increase

WOM intention (Bowen & Shoemaker, 2003). So we can hypothesize:

H4: Perceived value has a positive relationship with customers’ satisfaction in the restaurant

industry in Pakistan

2.6 Price Fairness

Price fairness means that the price the firm is offering is justifiable with the good or

service quality and is reasonable (Xia, Monroe, & Cox, 2004). Customers evaluate price

fairness through previous prices and most importantly the price of the competitors (Bolton,

Warlop, & Alba, 2003). Customers usually set a benchmark for price fairness that can be past

prices, competitors’ prices and prices other customers pay, etc. (Briesch, Krishnamurthi,

Mazumdar, & Raj, 1997). Customers usually relate the value to the price of the good or service

which in turn can change the satisfaction level (Anderson,Fornell, & Lehmann, 1994). If a

company offers fair price than the customer gets satisfied and gets loyal towards the company

that in turn increases the brand image. While on the other hand price unfairness can lead to

negative WOM (Campbell, 1999). Price fairness has a strong relationship with customer

satisfaction (Kaura, 2012; Herrmann, Xia, Monroe, & Huber, 2007). So we can hypothesize:

H5: Price fairness has a positive relationship with customers’ satisfaction of the restaurant

industry in Pakistan

When a customer is satisfied with a good or service, his loyalty increases which in turn

increases the repurchase of the good or service and subsequently the WOM intention (Getty &

Thompson, 1995). So we can hypothesize:

H6: Customers’ satisfaction is positively related to WOM intention in the restaurant industry

of Pakistan

2.7 Relationship Quality

The three main elements of relationship quality are satisfaction, trust, and commitment

(Walsh, Hennig-Thurau, Sassenberg, & Bornemann, 2010)

2.7.1 Customer satisfaction: Customer satisfaction is whether the customer has gained

utility in the good or service and has the requirements of the customer been fulfilled (Deng,

Lu, Wei, & Zhang, 2010). Satisfied customers engage in positive WOM whereas dissatisfied

customers engage in negative WOM (Oliver, 1999). A company’s present, past, and future are

dependent on customer satisfaction (Boulding, Kalra, Staelin, & Zeithaml, 1993). The main

element of customer satisfaction is the perceived quality (Bitner & Hubbert, 1994). Brand trust

also increases customer satisfaction (Delgado-Ballester & Munuera-Alemán, 2001). So we can

hypothesize:

H7: Customer satisfaction has a positive relationship with the trust of the restaurant industry

in Pakistan

If a customer is satisfied with the good or service he is committed towards its purchase

irrespective of competition or other situational factors (Vieira & Slongo, 2008). So we can

hypothesize:

H8: Customer Satisfaction has a positive relationship with the commitment towards the

restaurant industry in Pakistan

2.7.2 Trust: Trust is the basis of any relationship especially before and after the

experience (Singh & Sirdeshmukh, 2000). Trust implies that the customer holds an opinion

about the firm that it will understand his needs and will satisfy them. Sometimes the customers

trust the persons who are interacting with them while at other times they trust the organization

as a whole (Miller, & Jensen, 2007). Trust can enhance customer commitment to the company

(Vieira & Slongo, 2008). So we can hypothesize:

H9: Trust has a positive relationship with the commitment towards the restaurant in industry

Pakistan

When trust in a company increases it also increases customer satisfaction and

commitment which will also help to improve the WOM intentions of customers (Jalilvand et

al., 2017). So we can hypothesize:

H10: Trust has a positive relationship with WOM intention of the restaurant industry in

Pakistan

2.7.3 Commitment: The most important element of relationship quality is commitment

(Hennig-Thurau, Gwinner, & Gremler, 2002). Commitment is considered to be an attachment

to the firm (Beatty et al., 1996). A loyal customer is more attached to the firm. Switching is not

easy for loyal customers. The ultimate goal of commitment is WOM (Fullerton, 2003). So we

can hypothesize:

H11: Customer commitment has a positive relationship with WOM intention of the restaurant

industry in Pakistan

The concept that people change their decision of eating out in a particular restaurant

due to WOM is backed by the theory of reasoned action (Ajzen & Fishbein, 1980). The theory

of reasoned action studies the individual’s behavior. This theory basically tells how a certain

individual will behave in a certain situation based on previous or pre-existing attitudes and

behavioral intentions. The theory of reasoned action relates to our study based on the model

proposed by Ajzen and Fishbein (1980).

Figure 2.1: Schematic Diagram

3. Methodology

3.1 Data Collection Technique and Sampling Size

This study involves a quantitative research method for the collection of data. The survey

was conducted for the purpose of gathering the data. For the testing of hypotheses, a

questionnaire based on customer-restaurant relationships were filled out by the respondents.

Convenience sampling technique which is a part of non-probability sampling was used for the

selection of respondents. Measurement scales were adopted from different researches for

designing the questionnaire. In this study 5-point, Likert scale was utilized for the measurement

of items that range from 1=strongly disagree to 5=strongly agree. The questionnaire items were

adapted from the following sources:

Table 3.1: Measures

Variables Source

Food quality (Namkung & Jang, 2007)

Physical environment quality (Meng & Elliott, 2008)

Personal interaction quality (Vesel & Zabkar, 2009)

Perceived value (Chen et al., 2012)

Price fairness (Hassan, Hassan, Nawaz, & Aksel, 2013)

Satisfaction (Walsh et al., 2010)

Trust (Cassab & & MacLachlan, 2009)

Commitment (Fullerton, 2005)

WOM intention (Jalilvand, Samiei, Dini, & Manzari, 2012)

3.2 Population

3.2.1 Descriptive statistics of demographics and variables: Data were collected from

different restaurants and universities. A structured questionnaire was distributed among the

respondents and was asked to spare 10 minutes to fill it up. 400 questionnaires were distributed

out of which 328 questionnaires were completely filled. As far as the descriptive statistics of

the respondents are concerned, out of 328 responses, 102 respondents were males (31.1%) and

226 were females (68.9%). The overall analysis of the descriptive statistics of the respondents

is given in Table 3.2.1.

Table 3.2.1: Descriptive of Respondents

Category Range Frequency Percentage

Gender Male 102 31.1%

Female 226 68.9%

Age

15-20 88 26.8%

21-25 192 58.5%

26-30 33 10.1%

31-40 15 4.6%

Employment Status Unemployed

Employed

209

119

63.7%

36.3%

Table 3.2.2: Descriptive of variables

N Minimum Maximum Mean Std.

Deviation

Food quality 328 1.00 5.00 3.6885 .79634

Physical environment

quality

328 1.00 5.00 3.6951 .82282

Personal interaction

quality

328 1.00 5.00 3.4756 .84999

Perceived value 328 1.00 5.00 3.6006 .79544

Price fairness 328 1.00 5.00 3.4977 .86944

Satisfaction 328 1.00 5.00 3.6230 .90217

Trust 328 1.00 5.00 3.6199 .88587

Commitment 328 1.00 5.00 3.3902 .96250

WOM intention 328 1.00 5.00 3.6921 .94120

3.3 Measures

Researcher adapted a well-established 32 item instrument to elicit customer responses

towards WOM and its predictors. Smart PLS-SEM has been used to estimate the proposed

structural model. Researchers suggest calculating Cronbach’s alpha or composite reliability

(CR), average variance extracted (AVE) and heterotrait-monotrait (HTMT) ratio to establish

reliability and validity of the instrument. The overall calculated value of Cronbach’s alpha

(α=0.90) shows that the reliability of the instrument is established. However, the calculation of

reliability for each construct separately is preferable. PLS-SEM calculates CR, AVE and

HTMT ratio using PLS-Algorithm procedure. In PLS-Algorithm, CR and AVE calculated

under the head of convergent validity; while HTMT ratio is calculated under the head of

discriminant validity. The following Table 3.3.1 shows the calculated values of Factor

Loadings, CR and AVE.

Table 3.3.1 Reliability and Validity of the Instrument

Items Factor Loadings CR AVE

Commitment 0.887 0.723

CO1 0.858

CO2 0.891

CO3 0.801

Food Quality 0.907 0.619

FQ1 0.718

FQ2 0.825

FQ3 0.780

FQ4 0.856

FQ5 0.759

FQ6 0.774

Physical Environment

Quality

0.880 0.648

PEQ1 0.827

PEQ2 0.841

PEQ3 0.798

PEQ4 0.751

Price Fairness 0.902 0.697

PF1 0.818

PF2 0.855

PF3 0.861

PF4 0.805

Personal Interaction Quality 0.879 0.708

PIQ1 0.844

PIQ2 0.865

PIQ3 0.815

Perceived Value 0.874 0.698

PV1 0.838

PV2 0.833

PV3 0.835

Satisfaction 0.901 0.752

SA1 0.844

SA2 0.877

SA3 0.881

Trust 0.903 0.757

TR1 0.882

TR2 0.860

TR3 0.868

Word of Mouth 0.934 0.825

WOM1 0.901

WOM2 0.911

WOM3 0.912

The calculated value of CR and AVE shows that reliability and convergent validity is

established (See Table 3.3.1). Composite Reliability and Average Variance Extracted should

be greater than 0.70 and 0.50 respectively. Moreover, researchers suggest calculating HTMT

Ratio to measure discriminant validity. Discriminant validity represents that each of the

constructs measures a different concept from the other variables. Table 3.3.2 below shows that

discriminant validity is established as the calculated value of HTMT ratio is less than 0.90.

Table 3.3.2 HTMT Ratio

Sr. No Constructs 1 2 3 4 5 6 7 8 9

1 COM 0.851

2 FQ 0.597 0.787

3 PV 0.603 0.556 0.835

4 PIQ 0.657 0.653 0.608 0.842

5 PEQ 0.542 0.742 0.491 0.600 0.805

6 PF 0.582 0.532 0.648 0.604 0.489 0.835

7 SA 0.639 0.696 0.647 0.652 0.546 0.645 0.867

8 TR 0.723 0.712 0.653 0.663 0.614 0.639 0.774 0.870

9 WOM 0.717 0.669 0.660 0.614 0.524 0.613 0.704 0.716 0.908

4. Findings

To estimate the proposed structural model, the researcher applied PLS bootstrapping

procedure with 5000 iterations. PLS bootstrapping procedure calculates standardize root mean

square (SRMR) to evaluate model fitness. The calculated value of SRMR, i.e. 0.090 indicates

that the model is a good fit. Figure 4.1 below shows the model extracted through PLS-

bootstrapping procedure.

The model extracted through PLS bootstrapping indicates that all the proposed

antecedents of satisfaction i.e. FQ (β=0.396, p=0.000<0.01), PIQ (β=0.165, p=0.003<0.01),

PV (β=0.208, p=0.000<0.01) and PF (β=0.230, p=0.000<0.01) have positive and highly

significant impact on satisfaction except PE. Because PE is significant at more than 5% (β=-

0.062, p=0.229>0.05). Moreover, the model shows that FQ is the most significant driver of

customer satisfaction in the restaurant industry. In turn, satisfaction shows positive and highly

significant impact on trust (β=0.774, p=0.000<0.01), commitment (β=0.197, p=0.000<0.01),

and word of mouth intention (β=0.300, p=0.000<0.01). Resultantly, trust and commitment

depict positive and significant impact on word of mouth intention. The findings of this study

also show that satisfaction has both a direct and indirect effect on WOM through the mediation

of trust and commitment.

Figure 4.1: PLS Model

Also, researchers calculated the coefficient of determination, i.e. R2. The calculated

value of the coefficient of determination presents the amount of variance generated by the

independent variable into a dependent variable. Table 4.1 shows the calculated value of R2 for

the current model, i.e. COM=0.539, SA=0.632, TR=0.599, and WOM=0.631. Furthermore, to

cross-validate the coefficient of determination, researchers suggest calculating Stone-Geisser

Q2. The calculated value of Q2 should be greater than zero to establish the predictive relevance

of the structural model.

Table 4.1 Values of R2 and Q2

Constructs R2 Q2 Effect

Commitment 0.539 0.385 Large

Satisfaction 0.632 0.448 Large

Trust 0.599 0.492 Large

Word of Mouth 0.631 0.443 Large Small: 0.0<Q2 effect size<0.15; Medium: 0.15<Q2 effect size<0.35; Large: Q2 effect size>0.35

The current study was aimed to examine both the direct and indirect effect of

satisfaction on WOM through trust and commitment. We examined the role of trust and

commitment both as parallel and sequential mediators between the relationship of satisfaction

and WOM intention. To test whether mediation exists or not, this paper follows the guidelines

of Shrout and Bolger (2002), Preacher and Hayes (2008), and Zhao, Lynch, and Chen (2010).

They criticized Baron and Kenny's (1986) casual-step approach to test mediation and proposed

to calculate variance accounted for (VAF). VAF is defined as the extent to which indirect effect

absorbs the total effect. The following Table 4.2 shows the calculated values of direct, indirect,

total effect and VAF.

Table 4.2 Mediation Analysis: Trust and Commitment as Mediators

Sr.

No

Mediation Path Direct

Effect

Indirect

Effect

Total

Effect

VAF Mediation

1 SA-TR-WOM 0.300** 0.168** 0.468** 0.359 Partial

2 SA-COM-WOM 0.300** 0.072** 0.372** 0.200 Partial

3 SA-TR-COM-WOM 0.300** 0.403** 0.703** 0.573 Partial No Mediation: 0.0<VAF<0.20; Partial Medium: 0.20<VAF<0.80; Full Mediation: 0.80<VAF<1.0

** Highly Significant at .01 level of significance

* Significant at .05 level of significance

The first two, mediation paths show (See Table 4.2) trust and commitment as parallel

mediators; whereas path three measures the role of trust and commitment as sequential

mediators. The results of mediation analysis show that both trust and commitment (as parallel

mediators) partially mediate the relationship of satisfaction and word of mouth intention as the

calculated values of VAF, i.e. 0.359 and 0.200, respectively, are greater than 0.20 and less than

0.80. Moreover, trust and commitment show sequential partial and complimentary mediation

between the relationship of satisfaction and word of mouth intention. This sequential mediation

shows that satisfaction with the services increases trust level among customers that trigger

commitment with the particular services. That in turn positively influences word of mouth

intention.

5. Discussion

The aim of this paper was to find out the factors that influence WOM behavior of

restaurant industry in Pakistan. This study shows that quality and price fairness are the most

important constructs of WOM behavior in which relationship quality plays a crucial role. This

study confirms that food quality (β=0.396, p=0.000<0.01) is an important factor of customer

satisfaction which in turn influences WOM behavior. According to a survey conducted by

Cousins, Foskett, and Pennington (2011) it was found that customers were more concerned

about what they pay for; which means customers can overlook poor personal interaction quality

but they cannot overlook poor food quality. The second factor is price fairness (β=0.230,

p=0.000<0.01) In Pakistan people consider the prices before dining out. The third factor is the

perceived value (β=0.208, p=0.000<0.01). The fourth factor is personal interaction quality

(β=0.165, p=0.003<0.01). It seconds the results of the various previous studies that by

increasing the customer satisfaction services industry like the restaurant industry becomes more

successful. Hypothesis 2 is rejected in this study as it shows that the physical environment

doesn’t have a positive relationship with customer satisfaction rather it has a negative

relationship with it (β=-0.062, p=0.229>0.05) The most significant element of trust among

customers is customer satisfaction(β=0.774, p=0.000<0.001). Whereas commitment is also

influenced by satisfaction of the customers (β=0.197, p=0.004<0.005). Trust of the customers

in the resturant also leads towards the commitment towards the restaurant (β=0.571,

p=0.000<0.001). However WOM is influenced the most with commitment (β=0.368,

p=0.000<0.001), then is influenced by satisfaction (β=0.300, p=0.000<0.01) and lastly by trust

(β=0.217, p=0.001<0.005). This study does not support the study of Han and Ryu (2009)

according to which people prefer the physical environment while dining out. Our study rejects

the hypothesis and concludes that the physical environment does not increase customer

satisfaction rather may decrease it. The reason behind the rejection of this hypothesis can be

that people usually associate a good environment with the price and assume that prices are

usually high. They assume that good infrastructure requires money and restaurant management

usually get it by charging high prices to the customers. Pakistani people are really price

conscious, hence, their satisfaction gets decreased by a good physical environment due to their

assumption about charging high (Xiao, Yang, & Iqbal, 2019). This study shows that all the

three elements (satisfaction, trust, and commitment) of RSQ together trigger the WOM

behavior. The sequential mediation shows that satisfaction with the services increases trust

level among customers that trigger commitment with the particular services. That in turn

positively influences word of mouth.

Table: 5.1: Hypotheses Summary

Hypotheses Results

Food Quality-Satisfaction Accepted

Physical Environment-Satisfaction Rejected

Personal Interaction Quality-Satisfaction Acccepted

Perceived Value-Satisfaction Accepted

Price Fairness-Satisfaction Accpeted

Satisfaction-WOM Accepted

Satisfaction-Trust Accepted

Satisfaction-Commitment Accepted

Trust-Commitment Accepted

Trust-WOM Accepted

Commitment-WOM Accepted

6. Conclusion

As the standard of living of Pakistani people has been gradually improving since the

past few years, the trend of eating is also on the rise. Some of the factors that were determined,

which influences WOM behavior, RSQ plays an important and crucial role. This study

confirms the previous studies that food quality may be represented by freshness which is

comprised of aroma, juiciness, and crispiness (Péneau et al., 2006); taste (Cortese, 2003),

hygiene (Sulek & Hensley, 2004), variety in menu items, presentation (Kivela, Inbakaran, &

Reece, 1999) and temperature (Namkung & Jang, 2007). It delineates that food quality is a

significant predictor of customer satisfaction. Price fairness is another significant predictor of

customer satisfaction and it also goes in line with previous studies of (Gagić, Tešanović, &

Jovičić, 2013; Kaura, 2012; Herrmann, 2007). This study confirms that price fairness can

enhance customer satisfaction in the restaurant industry. Personal interaction quality and

perceived value as proposed by (Vesel & Zabkar, 2009; Ball, Simões Coelho, & Machás, 2004)

were also confirmed in this study that they do have an influence on customer satisfaction in the

restaurant industry. These two constructs are the basis of developing a strong relationship

between the customer and the restaurant. Employees’ interaction in service industry plays a

vital role in gaining a competitive advantage over rivalries and achieving differentiation for

developing value to customers. This study rejects the previous studies about the physical

environment as stated by (Garbarino, & Johnson, 1999) that overall satisfaction is increased

through the physical environment. This study develops a new result by showing that physical

environment quality in Pakistan has a negative relationship with customer satisfaction. In this

study, it was also proved that customer satisfaction affects trust which then affects commitment

and lastly it affects the WOM behavior of customers which supports the previous study of

(Walsh et al., 2010). When a customer gets satisfied, the customer develops the relationship of

trust with that particular firm which enhances WOM behavior. Similarly when a customer is

satisfied and develops trust then the customer gets committed with that firm which again

influences WOM behavior.

7. Managerial Implications

This study will be helpful for the restaurants’ management to improve their relationship

with the customers and to create loyal customers by satisfying their needs. As the economy is

growing, so is the services sector, which intensifies the competition among restaurants.

Therefore, the only way to survive is by providing service excellence. Most of the customers

rely on the information gathered from friends, family, and people in the neighborhood as it is

considered a trustworthy source. Hence the restaurants should provide high quality in order to

encourage the guts of people towards positive WOM. So the managerial implications can be:

The restaurateurs should focus on the quality of food rather than on the menu items as

it increases the level of customer satisfaction. Hence the kitchen staff should be provided with

essential training on how to consistently deliver healthy, tasty and mouth-watering food. The

quality of food cannot be judged until it has been experienced by eating it. WOM mostly

depends on both tangibles such as food and intangible services. To develop customer loyalty,

the restaurateurs should provide something unique and distinct to them, which can be achieved

through establishing a good relationship between the customer and staff, such as by gathering

feedback.

Personal interaction quality is among one of the most important factors for maximizing

positive WOM. Better interaction between customer and staff can lead to trust, emotional

attachment, commitment, and satisfaction which will, in turn, maximize positive WOM

intention. This study will also help restaurateurs to provide training to the staff for developing

good communication skills, the way in which the staff can communicate in a friendly and

trustworthy manner.

The perceived value should also be considered for maximizing positive WOM.

Customers enjoy their meal when they get better services and are should be willing to pay more

for perceived value. So the perceived value can be enhanced by providing free gifts, discount

vouchers and sometimes surprises. However, the surprises shouldn’t be so often that it becomes

a norm for the customers to consider revisiting a restaurant and they start expecting surprises

with every meal.

Relationship quality should also be maintained for positive WOM. Restaurants should

keep their promises in order to develop trust among customers.

In the world of competition, it becomes difficult for the restaurants to retain their

customers as customers get confused among the competitors. WOM is the best, convenient and

inexpensive way of spreading awareness about a specific restaurant to several customers.

Hence the restaurateurs should manage WOM by enhancing the relationship among potential

customers.

Restaurateurs should adopt the marketing strategy accordingly based on the age group

it has to target, theme, interior, etc. of the restaurant. Marketers should focus more on

youngsters as they are the main customers of restaurants (Namkung & Jang, 2010). The pricing

strategy should also be kept accordingly as a substantial proportion of people who love to eat

outside consists of middle-class people. Therefore, the focus should be a lower price which

may attract more customers.

8. Limitations and Directions for Future Research

In this study convenience sampling was used hence its findings could not be generalized

to all the customers of restaurants. Other researchers can study this model in different services

industries. Future researchers can also focus on the eWOM i.e. online reviews as the internet

plays an important role in spreading the information among larger masses at a much faster

pace.

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